- 58% of pending orders are to buy the Pound.
- 51% of traders still hold short positions
- Immediate resistance is at 1.3037
- The closest support is at 1.2934
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Upcoming events: US Import Price Index, US Monthly Budget Statement
The number of job openings in the US rose in March, according to the JOLTS monthly report. Data from the US Bureau of Labour Statistics released on Tuesday showed that the US job openings increased to 5.74M over the course of March, following the previous month's downwardly revised figure of 5.68M. Meanwhile, analysts anticipated a slight decrease to 5.67M. Job openings grew across business and professional services as well as in local and state government education, while they declined in education services. The number of hires over the reported month was changed insignificantly, coming in at 5.3M with an increase in social assistance and healthcare services, though a modest decrease was registered in logging and mining.
Moreover, data showed that total separations, including layoffs, quits and discharges, were little changed at 5.1M in March. The total number of separated employees diminished for government and was slightly changed for the private sector. Separately, the US employment data reported earlier this month suggested that the job market is likely to continue being strong.
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US Import Price Index and the Monthly Budget Statement
Wednesday has arrived, but there are not many events worth paying attention to today, but nonetheless, the US Import Price Index is due. It informs the changes in the price of imported products into the US. The higher the cost of imported goods, the stronger the effects they will have on inflation, redunding in a higher probability of a rate rise. Another event that could have some impact will be the US Monthly Budget Statement, which summarizes the financial activities of federal entities, disbursing officers, and Federal Reserve banks. A positive budget statement that receipts exceed budgetary outlays is seen as bullish for the USD.
Read More: Fundamental Analysis
GBP/USD strong above 1.2930
The market was indecisive on Tuesday due to lack of strong movers. The Pound found support at the 200-hour SMA mid-day, giving the confirmation that upside risks should prevail in this trading session. The pair may find resistance at 1.2982/90 by the lower boundary of the broadening wedge apparent on the hourly chart. This is the likely upper limit for today, as the closest resistance on the daily chart formed by the weekly R1 at 1.3037 may be too far to reach. Strong fundamentals for the Dollar may weaken the rate or even reverse it to the downside. In this case, the price should close in the 1.2938/1.2882 territory.
Daily chart
As was anticipated, the rising wedge pattern on the hourly chart has been breached to the downside, but the Cable still remained relatively unchanged, rather than falling under the 200-hour SMA. The given SMA appears to have provided support and kept the Sterling from falling below 1.29. However, the pattern can now be adjusted and turned into an ascending channel, with the new target becoming the 1.2870 mark, namely the channel's lower boundary, a point where a rebound is expected to occur.Hourly chart
Read More: Technical Analysis
Traders remain neutral
Market sentiment has remained unchanged, as 51% of traders are holding short positions. Meanwhile, 58% of pending orders are to buy the Pound.
A less optimistic situation is observed elsewhere. The sentiment at OANDA remains bearish, namely 63% of all open positions are short and the remaining 37% are long. Meanwhile, sentiment at Saxo Bank slightly improved, but still remains strongly bearish, with 61% of traders now being short and the other 39% - long on the Sterling against the US Dollar.
Spreads (avg, pip) / Trading volume / Volatility
Traders still indecisive
© Dukascopy Bank SABy the end of the next three months traders believe the Cable is to rise above the 1.30 major level, as 58% of survey participants believe so. While the current price is around 1.29, the average forecast for August 10 is 1.3028. The 1.32-1.34 range is now the most popular price interval, having 17% of the votes, while second comes the 1.30-1.32 interval with 16% of the voters, and the third place is tied by 1.28-1.30 and 1.34-1.36, with 12% of poll participants choosing either option.